Most folks are aware that solar installations are heavily subsidized by tax dollars, but less well-known is that even with subsidies ranging upwards of 30%, such installations still won't break even over the 20 to 25-year lifespan of the things. So government tries to "help" by mandating that utilities purchase excess solar power at roughly 2.5 times the kwh rate.
What this means, in most cases, is that utilities are obliged to purchase output from residential solar installations at 12.5 cents/kwh during the day, when the solar power is generated - but at night, when the residents actually use most of their power, the utilities "sell" power at 5 cents/kwh. This arrangement functions to give solar installation companies such as Solar City, as well as their residential clients, a free ride at the expense of others who lack the means or the rooftops to accommodate such installations themselves. It is, in short, a method of shifting the costs of solar from the relatively wealthy to the relatively poor.
Companies like Solar City get their money up front, in the form of government subsidies - which is why the company says that after 15 years, they "give" the solar units to the homeowner (pers. communication, Solar City). Remember: these are roof-mounted units with a life-span of 20 to 25 years. At some point, they have to be taken out. Roof repairs or replacement will likely be needed, and the solar units will be at the end of their lifespan. All of that cost falls to the resident.
Note: Solar City is but one of many installers, all operating from the same playbook.
So, let's cut to the chase: what's all this really mean? Your neighbors, after all, like one of mine, already have "free" solar mounted on their roofs. I looked into it; contacting California-based Solar City and other installers, and concluded that this is not a scam - but an unsustainable bubble much like the recent housing market bubble.
In recent days, this conclusion has been reinforced by economics experts like Steven Levitt and Stephen Dubner, as well as technologists. "Saving The Planet™" may well cost far more than you imagined.
